Jon Gruber Does Some Intellectual Garbage Collection and Cleans Up Some Thursday Idiocy: Casey Mulligan Knows No More About Health Economics than He Knows About Macroeconomics Edition

Instead of addressing a subtle and complicated issue with (at least!) two sides, the law’s critics keep turning it into a single-sided moral diatribe about the work ethic and the supposed damage Obamacare is doing to it. A perfect illustration is a recent New York Times Economix column by Casey Mulligan.... The genesis of Mulligan’s article is the surprisingly famous appendix to that CBO report—the part where the agency predicts that the Affordable Care Act will be associated with a reduction in the workforce of the U.S... voluntary job leaving by those who have been “locked” into their jobs by fear of losing health insurance... those who are deterred from working by higher marginal tax rates....

Mulligan... performs detailed computations which show that, for some individuals, that the tax rates can be quite high... [and] implies that these high tax rates are the reason for the CBO conclusions on reduced labor market participation. He dismisses the job lock effects as “a completely different issue…and far less prevalent.” He even cites the sentence on page 119-120 which ends with a footnote citing his work as evidence that CBO’s report is focused on high tax rates.

But Mulligan doesn’t mention that, in the very next paragraph, CBO dismisses his argument. According to the report, his suggested effect doesn’t impact labor supply, but rather health insurance offering (which they model elsewhere). Mulligan claims that CBO was “aware of instances of 100% tax rates,” which may be true, but... CBO economists... are uninterested in calculations that highlight extreme cases. They are more interested in modeling the overall impact on the workforce....

More important, though, is Mulligan’s casual dismissal of the other reason why the labor market is shrinking.... The CBO... never say[s] anything which would lead the reader to conclude that job lock concerns are “far less prevalent”.... Moreover, the CBO also includes a lengthy discussion of the potential positive productivity effects of loosening job lock....

Mulligan then goes on to misuse a quote of mine (as well as of Paul Krugman’s) that implies that we applaud the reduction in labor supply due to high marginal tax rates. Nothing could be further from the truth.... Mulligan—like so many of the law’s critics, in and out of the economics profession—gives a... one-sided view.... The Affordable Care Act, like any major reform, has its virtues and its flaws. The best economists, like the best public officials, are the ones who deal with both.

Instead of addressing a subtle and complicated issue with (at least!) two sides, the law’s critics keep turning it into a single-sided moral diatribe about the work ethic and the supposed damage Obamacare is doing to it. A perfect illustration is a recent New York Times Economix column by Casey Mulligan.... The genesis of Mulligan’s article is the surprisingly famous appendix to that CBO report—the part where the agency predicts that the Affordable Care Act will be associated with a reduction in the workforce of the U.S... voluntary job leaving by those who have been “locked” into their jobs by fear of losing health insurance... those who are deterred from working by higher marginal tax rates....